Politics

State might not cut 53,000 from Medicaid by year's end

Walker says state is halting planning for Obama health care law

Madison - Even if a year-end deadline runs out, the state won't automatically move to drop health care coverage for tens of thousands of low-income adults as previously expected, Gov. Scott Walker said Thursday.

In a second change in direction by the Republican governor, Walker said the state is suspending plans to implement the federal health care overhaul in Wisconsin while the nation's highest court considers whether to uphold that law.

A law the governor and GOP legislators enacted says the state must drop 53,000 adults from health care coverage in July if the federal government doesn't act by Dec. 31 to approve the Walker administration's plan to cut more than a half-billion dollars from health programs such as BadgerCare Plus.

In a letter earlier this month, President Barack Obama's administration gave preliminary approval to parts of that proposal but said it wouldn't be able to decide on other aspects of the plan until next year.

In an interview with the Journal Sentinel at the governor's residence, Walker said he would be open to making a deal with federal officials on a plan and then changing state law next year so the 53,000 adults wouldn't be dropped.

"Our bottom line is, even if it's going to take a tweak, we're not going to get up and say everybody's off for sure," Walker said. "I think (the federal government's) letter was pretty positive . . . they basically said we're interested in what you're talking about here, we just need some more time."

The federal Department of Health and Human Services has told Wisconsin officials that it would allow the state to raise monthly premiums for some adults on BadgerCare Plus but will need an unspecified amount of time to consider other changes, particularly those affecting children.

Separately, Walker said he was putting on hold the state's planning to create a so-called health exchange, a marketplace for individuals and small businesses to buy insurance coverage under the federal law passed last year.

The governor has consistently opposed the federal law, but his position on the exchange is new. Previously, Walker had said that he wanted the state to develop its own plan for an exchange so Wisconsin would have more control over how the law is implemented.

Under the law, the state must prove to the federal government by Jan. 1, 2013, that the state is prepared to implement its own exchange plan. Otherwise, the federal government will impose its own plan when the exchanges start in 2014.

But on Monday, the U.S. Supreme Court scheduled for the end of March several days of oral arguments to examine whether the law is constitutional.

"For us, with that issue potentially being resolved by the middle of July, it doesn't make a whole lot of sense for us to look at something that may not even be an option," Walker said.

The governor denied that he was bowing to pressure from conservatives such as state Sen. Frank Lasee (R-De Pere) who have said that Walker was seeking to implement "Obamacare."

Lasee had pledged to block legislation implementing the federal law in the Senate Committee on Insurance and Housing, which he chairs. He praised Walker for his decision halting work on the exchanges.

Walker said that if the Supreme Court upholds the health care law in a ruling this summer, the state would still have time to implement its own exchange.

But Jon Peacock, research director for the Wisconsin Council on Children and Families, questioned whether there would be time. The Legislature, for instance, isn't scheduled to meet after May of next year and might have to be brought back in a special session to pass any legislation needed for an implementation.

"I think that's a big mistake. If the Supreme Court doesn't void the law, that leaves the state ill-prepared," he said.

Peacock said that he was pleased, however, to hear that Walker was willing to compromise on the question of whether the 53,000 adults would lose their Medicaid health coverage.

Under the terms of the 2011-'13 state budget, the Walker administration needs to cut $554 million in state and federal money from Medicaid programs over the next 18 months to balance the state's books.

Instead of dropping the 53,000 adults as allowed under federal law, Walker is seeking a range of other moves such as sharply raising premiums; making it harder for people to qualify for Medicaid if their employer offers health insurance; and dropping people for at least a year instead of six months if they don't pay their premiums

The Walker administration's plan could affect even more people than the group of adults. An analysis by the nonpartisan state Legislative Fiscal Bureau says 65,000 people - nearly half of them children - would leave or be turned away from the state's health programs for the poor if the plan is approved.

Walker defended the plan, saying it left at least some possibility that people could keep their coverage and didn't leave them "out in the street."

But Pasch questioned that, saying Walker's saving plan was too "draconian." She said she hoped state officials would work with the Obama administration to improve it.

Patrick Marley of the Journal Sentinel staff contributed to this article.

About Jason Stein

Jason Stein covers the state Capitol and is the author with his colleague Patrick Marley of "More than They Bargained For: Scott Walker, Unions and the Fight for Wisconsin." His work has been recognized by journalism groups such as the American Society of News Editors, the Society of American Business Editors and Writers, and the Association of Capitol Reporters and Editors.